Letter of Credit
1) LETTER OF CREDIT (Documentary Credit):
A "Letter of Credit" is used as an instrument for settlement of payment from commercial transactions like sales/purchases in national/international trade. A letter of credit is a document that guarantees the buyer’s payment to the sellers. It is issued by a bank and ensures the timely and full payment to the seller. If the buyer is unable to make such a payment, the bank covers the full or the remaining amount on behalf of the buyer.
A) International LC:
NBL offer wide range of reliable credit and payment services to facilitate your imports. It issues all types of LC as per the requirement of our customers. The common types are as under:
- Sight LC
- Time/Usance LC
- Deffered/Mixed Payment LC
- Revolving LC
- Confirmed LC
- Transferable LC
- Back to Back LC
- Advance Payment LC
- Discounting LC
2) Local LC:
NBL also helps its customer issue Local LC when Buyer and Seller both are in the same country.
Documents required for issuing a Letter of Credit-
First and foremost customer must fill the LC application form followed by BI.BI.NI Form No. 3 (Mandatory document as per NRB). After this, the other documents required for issuing LC are:
- Proforma Invoice/Sales contract
- Harmonic code of the goods as per the Custom Tariff/NRB and incoterm must be mentioned in Proforma Invoice
- Certificate of Origin
- Certificate of Analysis
- Transport Documents (Bill of lading/Airway bill/Road Consignment bill)
- Insurance Policy
If the customer is issuing LC for the first time, we will require these documents as well:
- Firm/Company Registration Certificate
- PAN Certificate
- Board minute (if applicable)
- MOA (Memorandum of Association)
- AOA (Article of Association)
- Latest Tax Clearance Certificate
There are various other NRB provisions regarding import/export of goods from India and other third countries. We will help you to know these provisions so as to make you feel at ease while conducting import/export business.
How to apply?
- Open a current Account in our bank
- Contact our Relationship Managers for different credit facilities(TR loan, overdraft, LCs, Guarantees)
- Contact to nearest branch of Nepal bank or directly to Central Trade Finance Division, Dharmapath, Kathmandu.
Why choose us? (Facilities and Benefits in Nepal Bank)
- Applications can be submitted in any branch of Nepal Bank Limited.
- Applications received are processed within the same day. (subject to compliance of regulatory requirements and bank policies)
- Easy and fast processing
- Large network of correspondent banking with international banks.
- Advisory services as per the client requirements with our experienced trade finance team.
- Insurance services.
- Highly dedicated and skilled trade finance team.
- Competitive fees and charges in banking industry of Nepal.
View Service Charges of Letter of Credit
Letter of Credit FAQs